Muslim violence, no-work threats destroying economy in southern Thailand

The open-air market where Thanchanok Putroy sells catfish used to bustle on Fridays, just as on any other weekday. Now, it's eerily quiet, with most vendors staying home in fear that Muslim insurgents will make good on threats to kill or cut off the ears of anyone who works on the Islamic holy day.

"My business has been bad as customers are afraid to come out," lamented the 39-year-old merchant, chopping up a fish within the largely empty market in downtown Pattani, where most stores were shut and bus service had been halted.

Following 20 months of bombings, shootings and beheadings, the recent no-work threat has driven another nail into what is becoming an economic coffin in Thailand's insurgency-wracked southern provinces.

While separatists in the predominantly Muslim provinces of Pattani, Yala and Narathiwat sometimes target police and government officials, among the more than 900 dead have also been rubber tappers, shop owners, construction workers and ice cream vendors. About 80 percent of the victims have been civilians, including civil servants.

The insurgents have been secretive about their aims and their leaders, and it's unclear whether they are specifically targeting the economy or simply trying to undermine the government's credibility and blanket the region in fear.

Bombs have exploded at a department store and a cinema complex as well as at smaller businesses. The violence has extended from the three provinces to the nearby southern commercial hub of Hat Yai where, in April, bombs exploded at the international airport and at a food market-department store owned by the French Carrefour chain.

The shootings and bombings have driven off investors and tourists, prompted some skilled workers to leave and slashed production of key commodities in a region with rich resources but incomes among the country's lowest. Last year, monthly per capita income of the 1.8 million Narathiwat residents averaged 2,120 baht (US$ 51; euro 41), compared to the national average of 4,337 baht (US$ 105; euro 85).

"Trade has dropped 70-80 per cent. Shop keepers complain loudly. It is very quiet at night and people from outside dare not to come to the area," said Panya Ongsakul, chairman of the three provinces' chamber of commerce.

Once a separate kingdom annexed to Thailand in 1902, the country's southernmost region has long seethed with resentment against the central government and the largely Buddhist provincial authorities. The feeling of being regarded as second-class citizens has periodically erupted into rebellion, but now many Muslim villagers, while angry at the government, say their main priorities are ending the violence and improving their livelihood.

Those in the rubber, fruit, tourism and construction industries have been particularly hard hit.

Fear of ambush has forced rubber growers in remote areas to switch working hours, tapping rubber after sunrise rather than at night when rubber trees yields their best sap. A rubber tapper was the first person to be beheaded, in a hilly area of Narathiwat last year.

Soaring demand for rubber, driven by the booming Chinese economy, has doubled its price on the global market in the past two years, but growers in the south have failed to capitalize. Production of rubber sheets in Pattani province dropped from 3,729 tons (3,356 metric tons) in March last year to 391 tons (352 metric tons) in the same month this year, according to official statistics.

Prices of the tropical fruits rambutan and durian and other produce have plummeted as merchants from outside the area fear coming to buy. With profit margins low, some growers leave the fruit to rot on trees.

The border town of Sungai Kolok _ a popular destination for Malaysian and Singaporean tourists coming for cheap goods, good food and sex_ is virtually a ghost town at night following several bomb blasts. Malaysia periodically warns its nationals to avoid travel to southern Thailand.

The 117-room Royal Princess, the largest hotel in Narathiwat, was closed in January after its occupancy rate dropped by half and its owners apparently feared possible bomb attacks would damage the image of their hotel chain.

The number of tourists crossing three border checkpoints into the provinces dropped from 265,656 in the first quarter of last year to 165,449 in the same period this year, according to the Thai Tourism Authority.

Construction also has suffered after killings at building sites chased away Buddhist workers and some contractors from outside the area stopped bidding on new projects.

"When one bomb explodes, one contractor goes away," says Poj Phaiboonkasemsutthi, chairman of Yala province Chamber of Commerce.

Prices of quarried rock have doubled, the result of a shortage that developed after the government severely limited the use of explosives, which were reportedly stolen and used in bomb attacks.

Trying to walk a fine line between maintaining security and rescuing the economy, the government recently granted licenses for purchase of explosives. But Defense Minister Thammarak Isarangura, who warily approved the move, remarked that coffins would have to be stockpiled since he expected some explosives to fall into insurgent hands.

The government is scurrying to halt the downward spiral in other areas, providing soft loans, finding wholesalers to buy fruit and creating some 30,000 jobs. With commercial loans virtually halted, businessmen have urged the government to spur growth with more low interest loans and tax exemptions.

For the near future, however, even optimists express little hope for an end to the killing _ or the economic crisis, AP repoeted.